Complaint resolution service publishes case studies, recall information and consumer news.

Draped in the American flag in a country fighting multiple wars, the U.S. Senate yesterday heard testimony about the prevalance and ramifications of “payday loans”. Drive through any military town and you’ll see signs that offer money now in exchange for future wages. While that’s a risky business in many cases, the military’s stability removes much of the risk. And because of loopholes in lending laws, interest rates soar well past 100%.

Many military installations have specially trained financial counselors to work with service personnel, who do not typically make a lot of money. In some cases, the person is not only making a low wage, but is a young consumer who is inexperienced in such matters.

The Washington Post quotes a Department of Defense study released last month that said nearly 1 in 5 service personnel use payday loans. The U.S. Senate Banking Committee is studing the issue now.

Posted under Finance

AARP, the American Cancer Society Cancer Action NetworkSM (ACS CAN) and the American Diabetes Association are working together to defeat a proposal expected to be voted on in the US Senate SOON that could make health care coverage more expensive for sicker or older workers and eliminate coverage protections for important health screenings and treatments for cancer, diabetes and other life-threatening or chronic illnesses.

These leading health and consumer organizations previewed a joint national advertising effort that will help educate voters about negative effects of the Health Insurance Marketplace Modernization and Affordability Act of 2006 (S. 1955). Sponsored by Senators Mike Enzi (R-WY) and Ben Nelson (D-NE) the bill could make it harder for workers age 50 and older to get a job that provides health insurance, among other things.

In addition, health advocates worry about the long-term effects this bill will have on citizens nationwide, as it would preempt state guarantees of coverage for health benefits such as mammography, cancer screenings, emergency care, mental health services, and diabetes supplies and education.

The bill would allow any insurer to sell health policies that bypass state consumer protections requiring coverage for cancer screenings and treatments, diabetes supplies and education, well-child care and immunizations, maternity care, emergency services, and mental health care.

By doing so, Congress would partly undercut the states’ traditional role of regulating the business of insurance, such as setting requirements for what benefits should be covered and how insurance should be priced. The bill would let insurance companies sell health policies that do not meet state requirements, such as fairness in pricing for those who are older and those who are sicker.

AARP CEO Bill Novelli explains, “While it is a laudable goal to make health insurance more accessible and affordable for small businesses, the ‘Health Insurance Marketplace Modernization and Affordability Act’ does so by giving these businesses an incentive to avoid hiring or retaining sicker or older workers.”

“Ensuring access to cancer screenings and treatments is critical in the nation’s effort to reduce cancer deaths,” said John R. Seffrin, PhD, CEO for the American Cancer Society. “This bill would do more harm than good by undermining the critical work our volunteers and state legislators have done to ensure coverage for lifesaving mammograms, off-label prescription drugs and other benefits that help detect and treat cancer.”

American Diabetes Association CEO Lynn Nicholas said, “Forty-six states currently require state-regulated insurers to cover diabetes supplies, medication and treatment. S.1955, however, would allow small business health plans to bypass these vital coverage regulations. This would be devastating to millions of Americans with diabetes to whom this assurance of coverage has been a lifeline, not a luxury.”

The groups report calls pouring into lawmakers but urge consumers to continue calling. “We are a small business,” said Consumer Help Web President Joan Bounacos “but our first responsibility is to people, not an economic theory.” Bounacos’ consumer advocacy organization joined the others in calling for consumers to contact their Senators. “If you don’t know the number,” she advised, “you can always be connected directly. Just reference the Senate’s telephone directory, find your two Senators and call.”

Bounacos also urged that callers write to the American Diabetes Association at makingnoise@diabetes.org to tell them you made the call to help consumers.

Consumer Help Web acknowledges the work done by the American Diabetes Association in making us aware of this issue and providing much of the detail. All involved organizations are to be commended for their efforts in helping Americans stay healthier, not helping American financial statements grow.

Posted under Health

The Federal Trade Commission (FTC) told the Senate Committee on Commerce, Science, and Transportation Subcommittee on Consumer Affairs, Product Safety, and Insurance February 8 that the agency is currently investigating companies that offer consumer telephone records for sale, and plans to pursue the investigations vigorously. Lydia Parnes, Director of the FTC’s Bureau of Consumer Protection told the committee, “Companies that engage in pretexting – the practice of obtaining personal information, such as telephone records, under false pretenses – not only violate the law, but they undermine consumers’ confidence in the marketplace and in the security of their sensitive data.”

“While pretexting to acquire telephone records has recently become more prevalent, the practice of pretexting is not new,” the testimony states. “The Commission has a history of combating pretexting.” The first FTC law enforcement action targeting operators who used false pretenses to gather financial information occurred in 1999. The company offered to provide consumers’ financial records for a fee. The agency alleged the company’s employees obtained the records from financial institutions by posing as the consumer whose records it was seeking. The Commission charged that the practice was unfair and deceptive and violated the FTC Act, the testimony says.

Following passage of the Gramm Leach Bliley Act (GLBA), which specifically prohibits pretexting of customer data from financial institutions, the agency launched Operation Detect Pretext in 2001. “Operation Detect Pretext combined a broad monitoring program, the widespread dissemination of industry warning notices, consumer education, and aggressive law enforcement.” It followed up the first phase of Operation Detect Pretext with a trio of law enforcement actions against information brokers. “Because the anti-pretexting provisions of the GLBA provide for criminal penalties, the Commission also may refer pretexters to the U.S. Department of Justice for criminal prosecution, as appropriate. One such individual recently pled guilty to one count of pretexting under the GLBA,” the testimony states.

According to the testimony, an entire industry of companies offering to provide purchasers with the cellular and land line phone records of third parties has developed. The testimony notes that the agency could bring law enforcement actions against telephone record pretexters for deceptive or unfair practices under Section 5 of the FTC Act and that the FTC is currently investigating companies that appear to be engaged in telephone pretexting.

“Protecting the privacy of consumers’ data requires a multi-faceted approach: coordinated law enforcement by government agencies as well as action by the telephone carriers, outreach to educate consumers and industry, and improved security by record holders are essential for any meaningful response to this assault on consumers’ privacy,” the testimony says.
“The Commission has been at the forefront of efforts to safeguard consumer information and is committed to continuing our work in this area,” the testimony says.

Posted under Finance, Uncategorized